Digital Transformation in South Africa's Short-Term Insurance Sector: Traditional Insurers' Responses to the Internet of Things (IoT) and Insurtech
DOI:
https://doi.org/10.23962/10539/28657Keywords:
insurance, insurtech, internet of things (IoT), business models, digital transformation, South AfricaAbstract
This article explores the impact of the internet of things (IoT) and insurtech on South Africa's short-term insurance industry. The research found, based on interviews with high-level players in or connected to the South African industry, that while IoT and insurtech are significant potential drivers, the country’s incumbent insurers have to date been slow to adopt these digital transformation elements in their business models. This article outlines the drivers of IoT and insurtech, the factors influencing the slow adoption of these elements by traditional South African insurers, and recommendations for the adoption of these elements by South African insurers.
References
Accenture. (2016). Be digital: A R115,2 billion opportunity for South Africa’s short-term insurance industry. Johannesburg. Retrieved from https://www.accenture.com/t20170707T155858Z_w_/za-en/_acnmedia/PDF-25/Accenture-Be-Digital-POV.pdfla=en
Ayuso, M., Guillen, M., & Nielsen, J. P. (2019). Improving automobile insurance ratemaking using telematics: Incorporating mileage and driver behaviour data. Transportation, 46(3), 735–752. https://doi.org/10.2139/ssrn.2885214 DOI: https://doi.org/10.1007/s11116-018-9890-7
Breading, M. (2017). Smart cities and insurance: Exploring the implications. Strategy Meets Action (SMA). Retrieved from https://cdn2.hubspot.net/hubfs/732222/SMA-RR-2017-Smart-Cities-and-Insurance-082917-V115-Synerscope.pdf?t=1505751589866
Chekriy, S., & Mukhin, Y. (2018). Blockchain platform for insurance-related products. Edinburgh: The Glass Cube Company. Retrieved from https://icosbull.com/whitepapers/3394/i-chain_whitepaper.pdf
Cortis, D., Debattista, J., Debono, J., & Farrell, M. (2019). InsurTech. In T. Lynn, J. G. Mooney, P. Rosati, & M. Cummins (Eds.), Disrupting finance: FinTech and strategy in the 21st century (pp. 71–84). Palgrave Pivot. https://doi.org/10.1007/978-3-030-02330-0_5 DOI: https://doi.org/10.1007/978-3-030-02330-0_5
Ernst and Young (EY). (2016). The Internet of Things in insurance: Shaping the right strategy, managing the right risks. London. Retrieved from https://www.eycom.ch/en/Publications/20161109-The-Internet-of-Things-in-insurance/download
EY. (2017). The future belongs to the connected: Achieving the vision of digital insurance. London: Ernst & Young. Retrieved from https://www.ey.com/Publication/vwLUAssets/ey-achieving-the-vision-of-digital-insurance/$FILE/ey-achieving-the-vision-of-digital-insurance.pdf
Fuster, G. G., & Scherrer, A. (2015). Big data and smart devices and their impact on privacy. Brussels: European Parliament Directorate General for Internal Policies. Retrieved from https://www.researchgate.net/publication/289538954_Big_Data_and_Smart_Devices_and_their_Impact_on_Privacy
Geotab Africa. (2019). Adopting usage-based insurance for SA fleets [Blog post]. Retrieved from https://geotabafrica.com/adopting-usage-based-insurance
Groopman, J. (2015). Customer experience in the Internet of Things: Five ways brands can use sensors to build better customer relationships. San Francisco: Altimeter. Retrieved from http://boletines.prisadigital.com/Customer-Experience-in-the-Internet-of-Things-Altimeter-Group.pdf
Hancke, G., Silva, B., & Hancke, J. G. (2012). The role of advanced sensing in smart cities. Sensors, 13(1), 393–425. https://doi.org/10.3390/s130100393 DOI: https://doi.org/10.3390/s130100393
Hung, M. (Ed.). (2017). Gartner insights on how to lead in a connected world: Leading the IoT. Gartner. Retrieved from https://www.gartner.com/imagesrv/books/iot/iotEbook_ digital.pdf
IBM. (2011). Digital transformation: Creating new business models where digital meets physical. New York: IBM Global Business Services. Retrieved from https://www.ibm.com/downloads/cas/B6Y8LY4Z
Jonckie. (2019, September 13). Sensor Networks shakes up insurance sector [Blog post]. Retrieved from https://www.insurancechat.co.za/2019-09/sensor-networks-shakes-up-insurance-sector
Kang, B., & Choo, H. (2018). An experimental study of a reliable IoT gateway. ICT Express, 4(3), 130–133. https://doi.org/10.1016/j.icte.2017.04.002 DOI: https://doi.org/10.1016/j.icte.2017.04.002
Koduru, S., Reddy, P., & Padala, P. (2018). Integrated disaster management and smart insurance using cloud and internet of things. International Journal of Engineering C Technology, 7(2.6), 241–246. https://doi.org/10.14419/ijet.v7i2.6.10777 DOI: https://doi.org/10.14419/ijet.v7i2.6.10777
KPMG. (2019). The South African insurance industry survey 2019. Johannesburg. Retrieved from https://home.kpmg/content/dam/kpmg/za/pdf/south-african-insurance-survey-2019.pdf
Littlejohns, P. (2019, June 26). Six South African insurtech start-ups disrupting the country’s insurance market [Blog post]. Retrieved from https://www.nsinsurance.com/analysis/south-african-insurtech-start-ups
Lee, I. (2019). The Internet of Things for enterprises: An ecosystem, architecture, and IoT service business model. Internet of Things, 7. https://doi.org/10.1016/j.iot.2019.100078 DOI: https://doi.org/10.1016/j.iot.2019.100078
Marafie, Z., Lin, K.-J., Zhai, Y., & Li, J. (2018). Proactive fintech: Using intelligent IoT to deliver positive insurtech feedback. In 2018 IEEE 20th Conference on Business Informatics (CBI), Vienna. https://doi.org/10.1109/CBI.2018.10048 DOI: https://doi.org/10.1109/CBI.2018.10048
Marek, L., & Woźniczka, J. (2017). The Internet of Things as a customer experience tool. Jagiellonian Journal of Management, 3(3), 163–176. https://doi.org/10.4467/2450114XJJM.17.011.9562 DOI: https://doi.org/10.4467/2450114XJJM.17.011.9562
Maupa, M. (2018). 5 trends shaping the insurance industry in 2018 [Blog post]. Retrieved from https://www.fanews.co.za/article/intermediaries-brokers/7/general/1227/5-trends-shaping-the-insurance-industry-in-2018/23601
McAfee, A., & Brynjolfsson, E. (2012). Big data: The management revolution. Harvard Business Review, October, 3–9. Retrieved from http://tarjomefa.com/wp-content/uploads/2017/04/6539-English-TarjomeFa-1.pdf
Minnie, L. (2018, July 13). Best car tracking devices [Blog post]. Retrieved from https://www.autotrader.co.za/cars/news-and-advice/automotive-news/best-car-tracking- devices/2655
Mpala, D. (2018, March 12). 10 South African start-ups leading innovation in IoT [Blog post]. Retrieved from https://ventureburn.com/2018/03/iot-digital-all-stars
Petrolo, R., Loscrì, V., & Mitton, N. (2015). Towards a smart city based on cloud of things, a survey on the smart city vision and paradigms. Transactions on Emerging Telecommunications Technologies, 28(1), 1–11. https://doi.org/10.1002/ett.2931 DOI: https://doi.org/10.1002/ett.2931
Pillay, T. ( 2019). The influence of insurtech on the existing insurance business model. MBA dissertation, University of Pretoria. Retrieved from http://hdl.handle.net/2263/68935
Porter, M. E., & Heppelmann, J. E. (2015). How smart, connected products are transforming companies. Harvard Business Review, October. Retrieved from https://hbr.org/2015/10/how-smart-connected-products-are-transforming-companies
PricewaterhouseCoopers. (PwC). (2016). Insurance through challenging times: Insurance industry. Johannesburg. Retrieved from https://www.pwc.co.za/en/assets/pdf/insurance-industry-analysis-2016pdf.pdf
Republic of South Africa (RSA). (1998) Short-Term Insurance Act, No. 53 of 1998. Retrieved from https://www.gov.za/sites/default/files/gcis_document/201409/a53-98.pdf
Sandquist, E., Gasc, J.-F., & Sollmann, R. (2015). Reimaging insurance distribution. Accenture Research. Retrieved from https://financialservices.accenture.com/rs/368-RMC-681/images/reimagining-insurance-distribution-distribution-and-agency-management-survey.pdf
Santam Specialist Real Estate. (2019, May 27). Say hello to the house of the future [Blog post]. Retrieved from https://www.cover.co.za/say-hello-to-the-house-of-the-future
South African Insurance Association (SAIA). (2019). Board members. Retrieved from https://saia.co.za/board-members.html
Svahn, F., Mathiassen, L., Lindgren, R., & Kane, G. C. (2017). Mastering the digital innovation challenge. MIT Sloan Management Review, 58(3), 14–16.
Tayengwa, S. (2017). Digital transformation – the new-age insurer. Johannesburg: TransUnion Africa. Retrieved from https://www.cover.co.za/wp-content/uploads/2017/09/Digitisation-In-Insurance-Presentation-SamuelT-1.pdf
Vidanagama, T. N. (2017). Towards realization of an IoT environment: A real-life implementation of an IoT environment and its analytics. In 2017 Global Internet of Things Summit (GIoTS), Geneva. https://doi.org/10.1109/GIOTS.2017.8016259 DOI: https://doi.org/10.1109/GIOTS.2017.8016259
Zhou, W., Jia, Y., Peng, A., Zhang, Y., & Liu, P. (2019). The effect of IoT new features on security and privacy: New threats, existing solutions, and challenges yet to be solved. IEEE Internet of Things Journal, 6(2), 1606–1616. https://doi.org/10.1109/JIOT.2018.2847733 DOI: https://doi.org/10.1109/JIOT.2018.2847733
Downloads
Published
Issue
Section
License
Copyright (c) 2019 https://creativecommons.org/licenses/by/4.0
This work is licensed under a Creative Commons Attribution 4.0 International License.
How to Cite
- Abstract 1216
- pdf 343
.png){kind=spacer}